Sadly, last month four miners lost their lives in accidents at mines in Queensland, South Australia and Western Australia. That makes September 2021 one of the worst months in recent Australian mining history and should serve as a strong reminder that Health & Safety is and must always be the first priority for everyone in this sector.
From an economics perspective, after iron ore prices plummeted from more than 230 US$ in July to 90 US$ in September, the last couple of days showed a rally back to levels around 130 US$ per tonne. BHP, one of the iron ore giants in WA’s Pilbara region, remains optimistic despite an uncertain future, mainly due to a positive outlook for China’s economic growth going forward. BHP also has a comfortable buffer when it comes to prices fluctuations as their production cost for iron ore sits at US$ 13-14 at the moment.
In its latest World Economic Outlook, the International Monetary Fund predicts a strong increase in demand for metals critical for the energy transition, such as Lithium, Copper, Cobalt and Nickel. Australia is in the pole position to profit from that future demand with a multitude of mining projects in the planning stage. And that’s on top of currently operating mines – in 2020, Australia produced 49% of the world’s Lithium!
There’s more good news for the critical minerals sector: The Australian Government announced to establish a “$2 billion loan facility for Australian critical minerals projects to help secure the vital supplies of resources needed to drive the new energy economy and support the resources jobs of the future”. As many junior miners struggled to acquire financing for their mines in the past, this might help them kick-start their projects.